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CIMA E1 - MM > Business Organisations > Flashcards

Business Organisations Flashcards

1
Q

What is an organisation?

A

A group of people that is organised and managed to follow a corporate goal or need.

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2
Q

What does an organisational structure explain?

A

Who is in charge of whom and who has responsibility over what.

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3
Q

What are systems in an organisation?

A

Processes with steps of tasks that make things happen efficiently and consistently.

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4
Q

What happens when a freelancer takes on an assistant?

A

It becomes an organisation, necessitating more management and processes.

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5
Q

What are the two types of organisational structures?

A
  • Vertical (tall)
  • Horizontal (flat)
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6
Q

What does the scalar chain refer to?

A

The number of management levels within an organisation.

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7
Q

What is the span of control?

A

The number of people a manager has control over.

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8
Q

What factors affect a manager’s span of control?

A
  • Geographical location
  • Level of competency
  • Workload
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9
Q

Describe vertical organisational structures.

A

Focus on a strict hierarchical layering system with a long scalar chain and narrow span of control.

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10
Q

What are the advantages of vertical structures?

A
  • Closer supervision of employees
  • Clear lines of responsibility
  • More opportunity for promotion
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11
Q

What are the disadvantages of vertical structures?

A
  • More bureaucratic
  • Less employee freedom
  • Slower decision-making
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12
Q

Describe horizontal organisational structures.

A

Have fewer management levels with a short scalar chain and wide span of control.

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13
Q

What are the advantages of horizontal structures?

A
  • Quick decision-making
  • More cost-effective
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14
Q

What are the disadvantages of horizontal structures?

A
  • Less room for promotion
  • Managers have less control over employees
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15
Q

What can cause the transformation of organisational structures?

A

Changes in the internal and external environment, such as advances in technology.

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16
Q

What are virtual organisations?

A

Structures where most work is outsourced to other organisations.

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17
Q

What is a shared service capability?

A

Routine processes carried out by a shared service centre for multiple departments.

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18
Q

What are virtual teams?

A

Teams that work remotely towards a common goal using IT systems.

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19
Q

What challenges do virtual teams face?

A
  • Forming a team
  • Processes and goals
  • Leadership
  • Knowledge sharing
  • Morale
  • Cultural differences
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20
Q

What are profit-seeking organisations?

A

Organisations that aim to maximise returns for owners or shareholders.

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21
Q

What are unincorporated organisations?

A

Business owners and the business share the same legal identity.

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22
Q

What are the two main types of unincorporated organisations?

A
  • Sole trader
  • Partnership
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23
Q

What is unlimited liability?

A

Owners are personally responsible for all debts of the business.

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24
Q

What are incorporated organisations?

A

Businesses with a separate legal identity protecting owners from personal liability.

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25
Q

What are the two main types of incorporated organisations?

A
  • Private limited companies (Ltd)
  • Public limited companies (PLC)
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26
Q

What is a cooperative?

A

An organisation owned and controlled by its members rather than shareholders.

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27
Q

What are not-for-profit organisations?

A

Organisations that do not aim to make a profit for owners.

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28
Q

What types of organisations can exist in the public sector?

A
  • State-owned industries
  • Government-run departments
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29
Q

What are Non-Governmental Organisations (NGOs)?

A

Private sector not-for-profit organisations focusing on goals other than profit maximisation.

30
Q

What influences stakeholders in not-for-profit organisations?

A
  • Objectives and goals
  • Strategies
  • Management style and practice
31
Q

What are alliances in a business context?

A

When two or more firms join together to combine talents or strengths for growth.

32
Q

What is a characteristic of successful strategic alliances?

A

Reduced risk due to shared expertise and commitment.

33
Q

What is a sales alliance?

A

A sales alliance is when two or more companies sell products or services that complement one another.

For example, Starbucks and Barnes and Noble formed a sales alliance to sell coffee in bookstores.

34
Q

Define a geographic-specific alliance.

A

A geographic-specific alliance is an agreement to market products and services in a particular geographical location.

For instance, A Beer producing a popular beer in Country A and B Beer brewing and distributing it in Country B.

35
Q

What is an investment alliance?

A

An investment alliance is the agreement to combine funds for shared investment.

An example is the consortium of energy companies funding the Trans-Alaska Pipeline System.

36
Q

What characterizes a joint venture?

A

A joint venture is an agreement to share control, profit, and loss in a particular economic undertaking.

The alliance of Horace, Shahib, and Beatrice setting up a new company is an example.

37
Q

What is licensing in business?

A

Licensing is when one company or individual acquires a license to use another company or individual’s intellectual property.

Nestle’s deal with Starbucks to sell coffee products outside Starbucks’ cafes is a notable example.

38
Q

How does franchising differ from licensing?

A

Franchising involves more central control and requires individuals or companies to pay royalties or fees to use a company’s products and brand.

Fast-food chains like KFC and Subway operate as franchises.

39
Q

What are the four main types of organisational structure?

A

The four main types of organisational structure are:
* Entrepreneurial/Simple
* Functional
* Divisional
* Matrix

Each structure serves different organizational needs and sizes.

40
Q

What is an entrepreneurial/simplistic structure?

A

An entrepreneurial structure primarily exists in small businesses with a single boss managing the team.

Roles in this structure can be flexible to adapt to changing business needs.

41
Q

Describe a functional structure.

A

A functional structure groups the organisation into functional areas such as IT, marketing, and human resources, allowing operational efficiencies.

Employees focus on their specialized skills and knowledge.

42
Q

What defines a divisional organisational structure?

A

In a divisional structure, teams focus on a single product or service line and are more independent than departments.

Divisions may be organized by products, geographical areas, or customer types.

43
Q

What is a matrix structure?

A

A matrix structure features multiple reporting lines, where individuals may have more than one manager.

This is common in project-based environments.

44
Q

Fill in the blank: A project is a human activity that achieves a clear objective against a _______.

A

[timescale]

45
Q

What are the main stages of procurement development according to Reck and Long?

A

The main stages are:
* Passive
* Independent
* Supportive
* Integrative

These stages reflect the increasing strategic importance of procurement in organizations.

46
Q

What is the difference between purchasing and supply?

A

Purchasing is the acquisition of items as needed, while supply involves strategic focus and maintaining good supplier relationships.

This distinction typically applies in the later stages of procurement development.

47
Q

What are the four main supplier sourcing strategies?

A

The four strategies are:
* Single sourcing
* Multiple sourcing
* Delegated sourcing
* Parallel sourcing

Each strategy has different implications for supplier relationships and operational flexibility.

48
Q

What is the key principle of marketing?

A

Key principles include:
* Identify customer needs
* Serve those needs at an acceptable price
* Stress product benefits in promotional content
* Match sales approach with customer preferences

Marketing goes beyond just advertising and selling.

49
Q

What does human resource management (HRM) aim to do?

A

HRM aims to strategically deploy a company’s workforce to meet business goals.

It evolved from the need to safeguard workers’ rights during the industrial revolution.

50
Q

What were the working conditions for women and children during the 19th century industrial revolution?

A

Harsh conditions, working 60 hours a week in dangerous environments for very little pay.

51
Q

What role was created to safeguard personnel during the industrial revolution?

A

Welfare officer.

52
Q

When was the term ‘human resource management’ established in the US?

A

1980s.

53
Q

What is recognized as a company’s greatest asset?

A

Workforce.

54
Q

Why is employee retention important for a company?

A

To prevent skills, information, and expertise from moving to competitors.

55
Q

How can human resource management be defined?

A

The process of strategically aligning a company’s human assets to the needs of the business.

56
Q

What typical activities are included in human resource management?

A

Recruitment and training.

57
Q

What initiative did Unilever introduce in 2010 to improve employee well-being?

A

Fit Business Programme.

58
Q

What were the reported outcomes of Unilever’s Fit Business Programme?

A

A quarter of staff reported weight loss; improvement in health and productivity.

59
Q

How have finance and HR traditionally been viewed in organizations?

A

As two distinct areas with different roles.

60
Q

What is the finance function traditionally viewed as?

A

A cost to the business.

61
Q

What is the main responsibility of the HR function?

A

Functions relating to employees on a personal level.

62
Q

What is essential for HR and finance departments to do for organizational benefit?

A

Work together.

63
Q

What are some mutual decisions that finance and HR need to make?

A
  • Training budget
  • Paying overtime
  • Future workforce expansion funding.
64
Q

What are the six main areas of the human resources cycle?

A
  • Recruitment and selection
  • Training and development
  • Performance management
  • Motivation
  • Rewards
  • Job termination.
65
Q

What is the distinction between Information Systems (IS) and Information Technology (IT)?

A
  • IS: Systems managing information in an organization
  • IT: Technology resources used by a business.
66
Q

What are the key activities of the finance function?

A
  • Stewardship of financial resources
  • Interpreting and reporting financial position
  • Collating information for management
  • Budgeting and forecasting
  • Variance analysis and cost control.
67
Q

What are the 5 key components of the finance function?

A
  • Financial reporting
  • Financial planning
  • Management accounting
  • Treasury management
  • Risk management.
68
Q

What are critical success factors?

A

Key areas in which an organization must excel to remain competitive and profitable.

69
Q

How many critical success factors should an organization typically define?

A

No more than 4-5.

70
Q

What are key performance indicators (KPIs)?

A

Ways to measure an organization’s performance for critical success factors.

71
Q

Give examples of KPIs for a company that grows through acquisitions.

A
  • % of key staff retained
  • Cost savings from acquired companies
  • Sales/profit growth in joint business
  • Employee satisfaction before and after acquisition
  • Customer satisfaction before and after acquisition.
72
Q

What KPIs might a call center use to measure performance?

A
  • Average calls handled per operator per day
  • Average call-waiting time
  • Customer satisfaction with call outcomes
  • Client satisfaction with services offered
  • New business acquisition.

CIMA E1 - MM (11 decks)

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